Unlocking the secrets of successful Direct-to-Consumer businesses

As we zoom into 2024, TikTok stands not just as a digital marketing powerhouse but as an essential platform for e-commerce brands.

With its blend of catchy trends, user engagement, and an ever-growing audience, TikTok provides many opportunities for brands to boost their sales and online presence.

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In 2023, TikTok had 1.22 billion monthly active users, and it's projected to reach two billion by the end of 2024. About 49% of TikTok users say the platform influences their purchase decisions, leading to a 55% conversion rate for brand exposure.

Let’s discover how TikTok is now essential for your e-commerce brand and TikTok Shop or TikTok Advertisement can help you become the next viral brand. 

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1. First, let’s answer the basics: What is TikTok?

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Despite launching only in 2016, TikTok became widely known, and has been downloaded more than 3 billion times! 

Lifetime user spending on TikTok has risen to $456.7 million and generated an estimated $9.4 billion in revenue in 2022. 

It even overtook Google as the most visited internet site.  

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TikTok is a social media app that allows users to create content, share, and discover short-form videos between 15 seconds to 10 minutes long. 

It's known for its engaging content, creative filters, and music options. 

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2. And why do your e-commerce brands need TikTok? 

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The TikTok algorithm promotes content based on user preferences and decides which videos appear on your For You page. Unlike Instagram or Twitter, TikTok can show your content to users who don't follow you. Viral content is displayed to anyone the algorithm thinks will enjoy it. This means your brand can gain visibility beyond your followers and core audience.

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Here's how TikTok describes its For You page algorithm:

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A stream of videos curated to your interests, making it easy to find content and creators you love … powered by a recommendation system that delivers content to each user that is likely to be of interest to that particular user.

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Interestingly, TikTok does NOT base its recommendations on follower count or a history of previous high-performing videos.

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The average TikTok user spends 95 minutes on the app daily, with  90% of users accessing it daily. This has made TikTok the preferred social media platform for engaging and entertaining content. It has gained popularity across all age groups, making it the 6th most widely used social media platform.

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3. 4 reasons TikTok can help you grow your sales 

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^{92% of global users take action after watching a TikTok video.
Over 86B views for the hashtag #TikTokMadeMeBuyIt.} 

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Following the lead of Facebook and Instagram, the platform introduced TikTok For Business in 2020, simplifying the process for merchants to link their e-commerce stores. 

This feature enables them to create TikTok Ads, synchronise their product catalogues, and provide their audience with a distinctive shopping experience.

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• Vast audience reach: TikTok has a massive, diverse user base, providing a significant platform for brands to reach potential customers.
  37% of TikTok users go to the app to follow new trends. 
• Engagement and brand awareness: The platform's interactive nature fosters high engagement levels, helping to increase brand visibility and awareness.
• Influencer marketing: TikTok is home to numerous influencers across various niches, allowing brands to collaborate and reach targeted audiences effectively.
  41% of TikTok users say they are responsive to TikTok influencers' reviews.
• Viral potential: Content on TikTok can go viral quickly, offering brands the opportunity for exponential exposure. 

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4. TikTok Shop: Revolutionising online shopping and social commerce

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TikTok Shop UK is the platform's gem for your online store. 

It's where social media meets online shopping, offering brands a chance to sell directly on the app through your brand TikTok profile.

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Key features of TikTok Shop:

• In-Feed video and live shopping: Shop directly from TikTok videos and live streams in your For You feed.
• Product showcase: Discover and buy products from your favourite brands' profiles. Brands can curate custom collections on their profile pages.
• Shop tab: Explore a new product marketplace, find promotions, and manage orders all in one place. Product listings and shoppable content make shopping easy.
• Affiliate program: Creators can earn commissions by promoting products in short videos and livestreams. Sellers can choose the right Affiliate plan for their brand.
• Shop Ads: Sellers can promote their shops with TikTok Shop Ads for seamless shopping experiences.
• Secure checkout: Trustworthy third-party payment platforms ensure quick, smooth, and secure transactions. User data is stored and managed in the US.

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Thanks to different partnerships, you can easily manage your TikTok Shop through platforms like Shopify, WooCommerce, Salesforce Commerce Cloud, BigCommerce, and more.

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There are also additional apps and services for customer service like Zendesk or Gorgias, print-on-demand merchandise and reviews.

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_{Bigblue Tips
If you're into TikTok marketing, you need reliable logistics partners to smoothly reach your new TikTok community.
With Bigblue, your D2C e-commerce ally, you get efficient order fulfilment. Focus on marketing and product development while Bigblue takes care of the rest.
Work with us, book a demo here.}

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5. Mastering TikTok Ads

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^{67% of TikTok users say they discover new products through advertising.} 

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TikTok Ads offers advertising options like in-feed ads, branded hashtags, and brand takeovers. These ads can be targeted based on demographics, interests, and user behaviour, making them highly effective for e-commerce marketing strategy.

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5 tips to optimise your TikTok ads 

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• Use high-resolution images for your app ad to ensure visibility on the user's entire screen.
• Stick to a single call to action (CTA) to avoid confusing users with redirection links.
• Remember that ad descriptions are limited to 80 characters, consider incorporating text into visuals using the Video Creation Kit for complex products or services.
• Position key creative elements in the centre of the screen to prevent clutter, as ad descriptions appear at the bottom.
• Experiment with various targeting options and creative elements to optimise ad performance.

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Top performing trends: Influencer collab x Unboxing

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Unboxing videos are super popular on TikTok and can be a great marketing tool for e-commerce brands. They showcase products in a real-life context and build excitement around them.

Collaborating with influencers to create sponsored posts and sending a product to unbox is one of the top trends!

Like the example below, @Maisyleighs with @Logitech created a high-quality unboxing video featuring Maisy discovering her new Logitech keyboard features.
The video received more than 38k likes!  

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^{For e-commerce brands to truly harness TikTok's potential, a mix of creativity, audience understanding, and perfect timing is key.} 

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Content that resonates with TikTok's community, which is engaging, fun, and authentic, is crucial. Furthermore, leveraging influencer collaborations can bridge the gap between brands and their target audience, adding a layer of authenticity and trust.

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6. 5 best brands to follow on TikTok

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e.l.f. Cosmetics on TikTok (@elfyeah)

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e.l.f. Cosmetics harnessed TikTok's visual appeal and launched the viral dance challenge, #EyesLipsFace.

They even commissioned the catchy "Eyes Lips Face" song to promote their brand acronym, e.l.f.

This challenge skyrocketed with a staggering 9.2 billion views.

With 1.3M followers and 26.2M likes, e.l.f. collaborates with brands like Dunkin' for unique product launches.

Their partnership with beauty influencer Mikayla Nogueira resulted in a TikTok campaign that garnered 6 million views.

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Gymshark on TikTok (@gymshark)

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Gymshark, a UK-based fitness apparel brand, has nearly 5.3M followers and 93M likes on TikTok.

Their strong suit lies in collaborating with fitness and fashion influencers, radiating body positivity and self-confidence.

Gymshark actively fosters user-generated content (UGC) to cultivate a strong community around the brand.

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^{Encouraging UGC on TikTok can boost brand credibility and authenticity. Happy customers sharing their experiences can influence others and drive sales.}

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Their content not only inspires a healthy lifestyle but also beautifully showcases their products.

Engaging with popular trends and challenges like the “66 Days: Change Your Life”, generating over 193 million views on the hashtag #gymshark66. 

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Fenty Beauty on TikTok (@fentybeauty)

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Fenty Beauty, a cosmetics powerhouse, commands over 2.7M followers and 56M likes on TikTok.

Their commitment to diversity shines through, featuring various skin tones in makeup tutorials.

Educational content prevails, offering tutorials on product usage and teasing new releases.

Authenticity reigns as they provide glimpses behind the scenes and spotlight their diverse team.

Successful hashtag challenge campaigns like #TheNextFentyFace have fostered a sense of community. These challenges encourage UGC and create a sense of community around the brand.

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Dermalogica on TikTok (@dermalogica)

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Dermalogica, a skincare brand renowned for serums and moisturisers, has more than 114.4K followers and almost 1M likes.

They often share skincare tips and tricks, serving as a valuable resource for their audience.

Dermalogica's videos align with their brand's identity, showcasing a colour palette that mirrors their aesthetic.

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<sub>Bigblue Tips

Thanks to their unique unboxing made possible by Bigblue, the brand received more than 155 million views on TikTok!
👉 Discover Bigblue's unboxing experience</sub>

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Extra: Duolingo on TikTok (@duolingo)

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Not an e-commerce brand, but I simply love Duolingo’s TikTok strategy!

Duolingo gained popularity on TikTok, thanks to their witty and relatable mascot, the "angry owl".

This mascot inspired a trend in using mascots on TikTok, leading to the #mascottok category.

Duolingo now has 8.8M followers and 187.9M likes, renowned for its experimentation, humour, and distinctive brand voice.

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^{These brands have effectively harnessed TikTok's power to engage their target audiences through innovative content, strategic collaborations, and an unwavering commitment to authenticity and inclusivity.}

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By leveraging TikTok's unique features and vast user base, e-commerce businesses can increase their online visibility, engage with potential customers, and ultimately drive sales growth. 

Whether it's through interactive shopping experiences, creative ads, or strategic influencer partnerships, the potential of TikTok is immense.

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Brands like e.l.f., Dermalogica, Fenty Beauty, Gymshark, and Duolingo are excellent examples of how diverse strategies can lead to significant impact and success on the TikTok app.

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In summary, TikTok represents a dynamic and influential platform for e-commerce businesses, offering unique opportunities for brand promotion, customer engagement, and sales growth. Its integration of social media with e-commerce functionality makes it an essential tool in the modern digital marketing landscape.

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So, for e-commerce brands looking to up their game, diving into the TikTok universe could be the game-changer. It’s about blending your brand story with TikTok’s dynamic and playful spirit to create something truly memorable.

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Ysé Paris, started by Clara Blocman in 2012, quickly became known for redefining French lingerie.

Initially focusing on small-breasted women, the brand expanded to cater to all body types. Known for its comfort and natural beauty emphasis, Ysé also champions sustainability and inclusivity in its designs.

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With a focus on eco-friendly materials and ethical manufacturing, Ysé's collections resonate with conscious consumers. The brand's growth was driven by a varied product range and an effective transition from direct-to-consumer (D2C) to an omnichannel strategy. 

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Ysé's strong social media activity and support for social causes have further amplified its presence in the lingerie industry.

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1. The inspiring journey of Ysé Paris

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1.1 The birth of a lingerie brand with a strong mission 

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In 2012, Ysé Paris was born out of Clara Blocman's vision, to fill a gap in the French lingerie market for small-breasted women.

Clara Blocman and Bérengère Lehembre founded Ysé to offer comfortable, stylish lingerie while celebrating natural beauty.

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1.2 Embracing body diversity: The #lecorpsacoeur campaign 

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In 2015, responding to customer feedback, the brand expanded its range to include C, D, and E cups. The brand launched the #lecorpsacoeur “body to heart” campaign to celebrate women of all shapes and sizes.

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Since 2017, the brand diversified into swimwear, pyjamas, bodysuits, and loungewear (like knits), reinforcing its market presence. In 2019, the Etam Group invested and facilitated further growth.

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2. Ysé Paris brand identity: A commitment to sustainability and inclusivity

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2.1 Inclusivity at the heart of every lingerie design 

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Clara once stated, "Lingerie should be an ally, not an adversary. It should enhance, not alter”. 

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This principle has guided Ysé Paris since 2015, marking its commitment to inclusivity. The brand offers a variety of sizes to fit all body shapes.

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The brand redefines comfort in lingerie. The French lingerie brand prioritises comfortable materials and designs that enhance natural beauty. They believe in making people feel good about themselves through lingerie, rather than trying to change their appearance.

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2.2 A milestone in sustainable fashion: Ysé’s eco-friendly collection and brand manifesto 

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A few key initiatives: 

• Environmental impact: 90% of their A/W collection is made from environmentally responsible materials. It includes recycled and organic fibres, French-made fibres, upcycled fibres, and fibres from sustainably managed forests.
• Sustainability: 100% of their packaging is sustainably produced and made from recycled materials, FSC certified or recyclable. 
• Circularity: Clara has introduced initiatives for customers to give their lingerie a second life. Choices are repairing it, giving away old items, or selling them again, promoting a circular economy and reducing waste. For example, for their Acte II collection, over 30,000 items were created by upcycling.
• Social responsibility: Ysé Paris ensures fair working conditions in their production process. 100% of their workshops were audited to protect worker's rights protection.

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Ysé Paris’ transparency extends to its supply chain, offering customers insight into where and how their lingerie is made. They are partnering with Fairly Made to improve the traceability of their products. 

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The product’s label is also detailed for each product on the website.

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3. Ysé Paris’ omnichannel strategy: From a D2C brand to a retail success 

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Initially a Direct-to-Consumer (DTC) only brand, it rapidly expanded and now has an omnichannel approach. 

The brand has been distributed by Le Bon Marché Rive Gauche since 2013 and followed by Galeries Lafayette. 

In 2015, the brand also started to open shops in Paris and other cities in France. They also developed B2B partnerships with high-profile brands like Monoprix and Sézane. Clara mentioned that 40% of her sales (€10M) comes from her stores. 

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4. Ysé Paris’ unique communication strategy and marketing positioning 

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4.1 Product release: Limited sales and collection 

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The brand releases only 8 limited collections each year and gives “rendezvous” with their clients annually at the same time.
Each collection has its own mood and characteristics. 

The brand's strategy of limited-time sales adds an element of exclusivity, making each product feel special.

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4.2 Product name’s strategy: A touch of fun and Parisian chic

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The brand has an interesting strategy regarding their products naming: 

• Oh là là Stockings
• Ne le dis jamais (never tell anyone) Shorty
• L'extase (ecstasy) Bandeau bra
• Élu de mon coeur (chosen by my heart) Brief
• Un slow avec toi (a slow dance with you) Thong

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They add a Parisian chic vibe and a unique approach that makes their product highly recognizable. 

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4.3 Social media engagement: UGC and influencers collaboration 

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Ysé actively engages with its community on platforms like Instagram and TikTok.

^{Instagram: 285k followers with more than 6k post for the hashtag @yseparis
TikTok: 29.5k followers with 2.3M views for #yséparis}

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The page features product photos and collection releases with models from different origins and with different shapes. 

They also repost user-generated content (UGC) and influencer collaboration. For example, one of the format they use “in @... wardrobe” .

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Partnering on YouTube with influencers to create unboxing videos. For example, the brand recently collaborated with YouTuber Katie Louise. 

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They also use social media to engage in different social causes. They partnered with My Lubie to talk about sexuality or with Savonnerie Ciment France for fighting against breast cancer. 

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Embracing both inclusivity and sustainability, Ysé has shown that fashion can be both beautiful and responsible. 

Their journey from a small start-up to a renowned brand in the lingerie industry highlights the importance of listening to customers and staying true to core values. 

Ysé stands as a prime example of how a brand can successfully blend style, ethics, and environmental consciousness.

The digital revolution has undeniably transformed the way we consume. The arrival of e-commerce, combined with the rise of social media, has indeed brought brands closer to their customers. A direct link is perfectly illustrated in the new business model of Direct to Consumer (or D2C).

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In an increasingly saturated landscape, consumer choice is no longer guided solely by the quality of an item or the prices charged by sellers.

Storytelling and the ability to segment and personalise products make the difference today. The D2C model offers companies a different way to interact with their target and sell without the hassle of intermediaries.

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As all industries embrace this model, your brand may question its relevance. This is an opportunity for us to zoom in on the particularities of the D2C business model, its advantages, and the challenges it can pose.

But also to present you with the best practices to start your transition smoothly!

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1. What does Direct to Consumer (D2C) mean?

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Traditionally, the supply chain has involved several links, from the manufacturer to the wholesaler/distributor, ending with the retailer and its customers.  

However, each step to moving from one actor to the next often involves lengthy negotiations, additional costs and delays. The main drawback of this sourcing model is the need for more agility for brands, for whom each new launch implies a lot of waiting and frustration.

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The Direct to Consumer strategy breaks these chains and eliminates the middleman. Companies following it control every step, from manufacturing to distribution, and can sell their products directly to their end consumers.

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By eliminating the middleman, brands that choose D2C gain greater freedom.

They also benefit from a better knowledge of their customers base and the ability to adapt their offer to their (constantly changing) needs. D2C companies also can create a customised customer journey and experience. An effective way to differentiate themselves from traditional brands is by trying to beat them at their own game rather than by positioning themselves in proximity to their customers.

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1.1 Direct to Consumer: a new wind blowing from the United States to Europe

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The trend of Direct to Consumer brands comes straight from the United States. The first to make a name for themselves in this niche emerged a few years ago, particularly in the fashion sector. Examples include the eyewear manufacturer Warby Parker, Bonobos and Everlane for clothing, and The Honest Company for beauty.  

The model is even beginning to tempt several brands, many of which try to reappropriate it.

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Last July, for example, Unilever paid $1 billion to buy the subscription-based razor brand Dollar Shave Club.

Walmart has acquired the Modcloth brand and is preparing to acquire Bonobos.

And let's not forget Adidas, which plans to generate 50% of its sales in D2C by 2025.

Some companies even fully pivoted to being D2C as part of their sales strategy, like Loop Earplugs for example.

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According to a study by Club CMO and Epsilon-Conversant, 80% of major retail brands believe that new D2C companies impact their business. These newcomers are even forcing them to change their marketing strategy significantly...

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^{By 2022, 13% of brands in Europe were D2C brands.}

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Fashion was one of the first markets to adopt it, with brands such as Gymshark and Sézane. Jewellery (Gemmyo, Edenly), leather goods (Dymant), optics (Jimmy Fairly and Polette) and bedding (Tediber) followed closely. Not to mention cosmetics brands (such as Baija, Horace or e.l.f.) that have become leaders in recent years.

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2. What are the advantages of the Direct to Consumer model?

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This wave of new brands, but especially the reorganisation of the big names in retail to integrate the D2C model, indicates that the latter has many advantages for e-commerce brands.

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2.1 Fewer intermediaries, more margin

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Eliminating the players that stand between you and your customers allows you to regain control of your profit margin. By cutting out the middleman between the factory and its customers, Made.com has reported savings of about 70%.

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That's good news for your loyal customers since you won't have to inflate the price of your products to make a profit. But also for your brand, because the fees or commissions you used to reserve for your partners can now be reinvested in your growth strategy. For example, the optimisation of your website, your presence on social networks, or the R&D on your products.

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2.2 More direct communication with your customers

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Intermediaries don't just cut your margins; they can also blur communication between your brand and its customers.

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When you depend on other companies to sell your product, you miss a lot of data that could be invaluable to your brand's development. Data has become one of the most valuable digital native brand assets. For example, LePantalon's omnichannel approach stimulates continuous innovation and allows it to launch new collections faster.

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Unlike brands that go through traditional retailers to sell their products and who only have information from their inventory, you can test your offer. But also to make your prices evolve or to suggest complementary products to the checkout.

Data such as the shopping cart abandonment rate or the churn rate of your e-commerce site will also allow you to better understand your customers' journey.

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2.3 A personalised offer, therefore more impactful

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Another advantage of the Direct to Consumer model is your ability to understand and interpret your customer data. This data allows you to tailor their shopping experience (online and offline). It is also an opportunity to evolve your product line to better match your market's expectations.

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You can better understand their needs by multiplying the contact points with your personas on different digital channels (like social networks, via your website, etc.). And thus, personalise your offer to make it even more desirable. This is even more crucial for a young brand that wants to enter an ultra-competitive sector (like fashion or beauty).

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The D2C allows one to adopt a personalised approach and differentiate oneself on criteria other than price or brand loyalty.

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Take the example of Bar à Boucle, which interacts with its customers through networks and workshops and via a diagnostic tool on its website, which allows it to target their needs very precisely to offer highly personalised products. This data is then used to develop the brand's offer and grow their email lists.

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2.4 More agile and resilient to market disruptions

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The pandemic has profoundly transformed purchasing behaviour. It has disrupted supply routes, forcing brands to rapidly adapt their strategies. Because they are not directly dependent on intermediaries, companies that have opted for the Direct to Consumer model are more responsive. They are also better able to evolve.  

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In a Catch-Up episode of the podcast Le Panier, the brand Merci Handy mentioned that it needed only three months to restock its products before the pandemic. This delay has been doubled, due to the lack of available transportation means, pushing the restocking time to 6 months.

Inventory management is now a massive issue for e-commerce!

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Look at how the men's shaver stock has been completely transformed in less than ten years. We have gone from the hegemony of a brand like Gilette, which held more than 70% of the market share, to the advent of newcomers like Dollar Shave Club or Harrys.

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Faced with positioning challenges and the ultra-fast emergence of values that brands are being asked to align themselves with environment concerns, and social justice, agility is becoming not a competitive advantage but a necessity!‍

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3. The challenges of direct selling

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However, the Direct to Consumer model is not a guaranteed path to success. Before adopting it or transitioning to greater independence from your intermediaries, it is crucial to understand the potential costs, especially the risks involved.

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We recommend that you consider, among other things.

• The complexity of positioning. Without resellers to support your distribution, you will have to work harder to make your brand stand out! You must make sure your target audience discovers your offer on the channels (via advertising or content creation on social networks). Thus, if brands that have opted for D2C perform well in sales and customer loyalty, they generally need help to gain awareness.
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• Complex management. It is up to you to control everything, from producing your items to the branding of their packaging, including their storage and delivery. To manage a D2C business, you must invest in the right resources, especially logistics. This is a prerequisite to match the service retailers offer to their customers.

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4. How to launch your D2C brand or transition to the Direct to Consumer model?

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Launching your brand using the Direct to Consumer model has its challenges. But none is unachievable, especially if you lay the proper foundation!

Here are our tips for successfully using this model:

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4.1 Work on the storytelling of your brand

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A common thread in many D2C brand success stories is the strength of their storytelling. And their ability to attract and retain their target audience by embodying this story in the person of their founder.

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Whether in fashion (with Pauline Torres and her brand Pauème) or in beauty (through Justine Hutteau, the founder of Respire), the link between a successful D2C and its customers is even more vital when a real person mediates it. This is an excellent way to answer the "why" of the brand's existence, which is crucial in the context of saturation.

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The founder embodies his mission and justifies the creation and relevance of his brand humanly and emotionally.

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4.2 Start with a limited selection of items

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A limited product line allows you to test your distribution model before scaling. With a suitable distribution model and a reliable, fast way to get products to your customers, you will be able to get your brand off the ground.  

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So rather than blowing your product budget by developing a wide variety of products, focus on a few essential items. Then, ensure you can effectively get them into your Consumer's hands before diversifying.

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4.3 Packaging and delivery: two essential elements of the customer experience

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The survival of your Direct to Consumer brand depends on more than just the quality of your product or your ability to segment your offering.

As a reminder, 72% of consumers say that fast delivery is the most critical factor when shopping in online stores.

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A considerable part of your customers' satisfaction depends on your ability to manage your stocks and your delivery speed (especially in the last mile). But also the branding and the quality of your packaging.

They expect to receive their product as soon as possible, to be able to track it from your warehouse to their address and to open a package branded with your brand name.

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‍The post-purchase experience is the key to building customer loyalty!

You must pay attention to your logistics partner to meet their demands and ensure that they recommend your company. Bigblue helps you take it to the next level with unbeatable shipping rates and a 5-star carrier network.

Dazzle your customers with faster-than-lightning delivery and an unforgettable unboxing experience!

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Whether you launch your e-commerce platform or you want to develop your activities, logistics will always be a determining element of your success. Beyond sourcing or product development, marketing strategy, and the implementation of reactive customer service, logistics allows you to meet the first requirement of today's consumers: to receive their orders as fast as possible.

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According to an OpinionWay study, the delivery time and the respect of the delivery time are the most important purchase criteria!

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However, logistics has become relatively complex in the e-commerce sector in recent years, especially with the rise of Amazon Prime and its free two-day delivery. Your customers' expectations are shaped by this new fast delivery standard, which forces you to consolidate your supply chain management. And to anticipate the multiple logistics issues unique to e-commerce.

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Do you already have a headache just thinking about this massive project? No worries! In this article, we'll take a deep dive into how e-commerce logistics work. But also, to understand how to offer the best shipping options to your customers!

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The icing on the cake: you'll also discover why outsourcing your logistics with a Third-Party Logistics (3PL) company has become commonplace for e-commerce brands. But first, let's get back to the basics of this complex topic.

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1. What is e-commerce logistics or e-logistics?

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In short, e-commerce logistics refers to the processes involved in storing and shipping your products. With over 160 billion packages delivered every year in the world, it is essential to have a system in place that is efficient enough to ensure that your orders arrive on time while keeping your logistics costs under control.

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E-commerce logistics covers a wide range of events and elements: the supply chain starts when your manufacturer's inventory is transported, and ends when your products arrive at the customer's destination.

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But beyond transportation issues, logistics management is one of the most critical elements of your business. This includes tracking your inventory and stock level. You have to ensure that you have the needed amount of finished goods ready in a distribution centre near your customer available for fulfilment. This is a prerequisite for meeting sustained demand, even during busy holiday seasons or sales periods.

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Any shortfall (for both communication and execution) in your supply chain will hurt the customer experience. And unfortunately, that can quickly impact your revenue...

But don't panic! The better you understand your customers' needs and expectations, the more you can deliver a frictionless experience.

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2. Understand your consumers' expectations

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2.1 Shipping costs: an obstacle to purchasing for European consumers

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To make the right decisions regarding your e-commerce logistics, you have to start at the beginning. In other words, your first task is to identify the needs and expectations of your target market. Starting with the price your future customers are willing to pay for the delivery of their order. Indeed, this parameter will directly and significantly impact your business model and your logistics organization!

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The main difficulty you may encounter affects all merchants. This difficulty is to find a balance between high e-commerce logistics costs and consumers who are used to not paying shipping or return costs for their orders.

68% of European online shoppers abandon their carts due to high shipping costs, as per multiple studies. They would rather cancel their order and look for a website with no shipping costs (which they will have no trouble finding).

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2.2 Are there alternatives to free shipping to optimise costs?

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However, there are situations in which a customer will be more willing to pay for the delivery of their order.

According to Trusted Shops, this is the case if they are very interested in the product when the shopping cart is less than £22. Or if the shipping costs do not exceed £5! It is up to you to carry out surveys, and studies or to observe the behaviour of your site's visitors to define their limits!

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Besides shipping costs, consumers are also susceptible to transparency. They will be more likely to abandon their shopping cart if the paid delivery is not announced before their journey. But they will also be put off by an unclear returns policy.

‍

In general, transparent e-commerce logistics will always allow you to limit disputes and thus keep your customers loyal.

‍

And more generally, here are some ideas you can apply to:

• Waive delivery fees in exchange for an annual or monthly subscription (Amazon Prime’s model);
• Offer free shipping during specific promotional periods only;
• Offer free shipping in exchange for a minimum shopping cart amount or a minimum number of items ordered.

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Once you have understood your consumers and defined your policy, it's time to take action! Let's start by deciphering the range of options you can choose from.

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3. What e-commerce logistics options are available to you?

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When it comes to e-commerce logistics, you will generally have to choose between:

• Direct delivery (or dropshipping);
• E-commerce fulfilment partners;
• The implementation of your own logistics system (most often via a partnership with a carrier).

Let's see what the main characteristics, advantages, and disadvantages of each of these options are.

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3.1 Dropshipping

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Dropshipping is a system of e-commerce logistics consisting of offering products that you do not store yourself. These products will be delivered directly to the address of your customers by their manufacturer or supplier.

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The advantages of dropshipping

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Dropshipping offers many advantages. Starting with the fact that you don't have to buy inventory. Therefore, this strategy considerably reduces your initial investment and risks, especially in terms of inventory management and shipping processing. Dropshipping is, consequently, the least demanding option in terms of e-commerce logistics.

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Drawbacks of dropshipping

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Nevertheless, don't forget that it is also the most competitive and the least profitable. If you don't have to take care of inventory and delivery, your margins will also be lower (between 15 and 40% depending on the product). Not to mention your leeway in terms of customer experience, which is also very limited.

In addition, be aware that even if you go through an intermediary, you are still legally responsible for product defects. But also for delivery incidents or accidents related to the use of the sold product! A risk that remains low but essential to be aware of.

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3.2 Outsourcing to an e-commerce fulfilment partner

‍

Another way to outsource your e-commerce logistics operations is to work with a third-party e-commerce logistics partner, or 3PL. In concrete terms, your e-commerce company will entrust storage, effective inventory management, order processing, picking, packing and shipping to a partner.

‍

The advantages of e-commerce fulfilment services

‍

The whole point of e-fulfilment is to simplify your life while benefiting from a dedicated service provider’s expertise, technology, and quality control.

The negotiation with the different transport partners is already done, and you will benefit from preferential rates and you access to preferential rates for storage space, order processing, and shipping.

Unlike dropshipping, you own your inventory, which means you have to invest more capital. On the plus side, you will make a higher margin with more control over your inventory and sales process.

For example, if you choose to work with multiple carriers, you will probably need an automated platform to track your orders and inventory at once. Your 3PL will provide you with the needed tools like access to inventory management software that gives you full inventory control.

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‍

The disadvantages of e-commerce fulfilment services

‍

Keep in mind, however, that hiring a partner to execute your e-commerce logistics is not free. This logistics approach is therefore often used by online stores with large sales volumes. When you are starting a small business, you might consider this next option. 

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_{Bigblue Tips
By choosing a platform like Bigblue, you will be able to decide which carrier (Colissimo, Mondial Relay, UPS, Colis Privé...) or shipping method (standard, express, green delivery) is the most suitable for your customer and product. Some will even help you make this choice automatically, especially for bulky parcels or international shipments.}

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3.3 Set up your own e-commerce logistics system

‍

To avoid working with a third-party logistics partner, you can also choose to manage your e-commerce logistics from A to Z internally. But beware, this also represents a lot of work and constant unanticipated events to manage.

‍

If you don't want to deal with all your orders (from printing labels to managing returns), you can team up with a logistics partner, which will involve additional costs.

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To limit the risks (inefficient service provider, delivery errors,...), you will need to work with different carriers. And thus, to compare the options to track the status of orders, the speed of delivery, the possibility of recovering packages at relay points, etc... To sum up, it demands a lot of effort and time!

‍

4. What logistics capabilities are critical to your e-commerce business?

‍

Whether you decide to use an external partner or develop your own e-commerce logistics service, it is essential to optimise the following elements.

‍

4.1 Inventory location

‍

As the shipping cycle gets shorter and shorter, sellers are now forced to store their inventory in smaller warehouses closer to their customers.

This also allows them to work with local carriers, which are often less expensive.

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4.2 Big Data and Artificial Intelligence conquer e-commerce logistics

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Mega data, enhanced by AI, is also changing the game in e-commerce logistics.

When properly mastered, these tools can help you identify demand patterns and trends. And thus, better plan your inventory according to the interest for your products.

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4.3 Automation

‍

Essential to meeting demand as quickly as possible, automated systems can also notify your customers of a potential delay with tracking emails or notifications.

Automated delivery trucks and drone delivery will also be commonplace shortly.

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4.4 Synchronisation

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Silos are the enemy of logistics. Synchronising all elements of your supply chain can reassure your customers about the status of your inventory and its shipment.

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5. The last-mile delivery, the spearhead of e-commerce logistics

‍

Your logistics management is the most complex and expensive component (between 28% and 53% of the total cost). First, because it forces your customer to stay home to receive their order. Second, because it represents the last interaction with your brand. For all these reasons, it must be part of your priorities.

‍

E-commerce is not only about the quality of your offer.

‍

To succeed in an increasingly competitive market, you need to meet the demands of your future customers, especially in terms of delivery. Whether through a third-party logistics provider or by developing your in-house capabilities, strong e-commerce logistics is essential for your business to grow and thrive!

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E-commerce logistics can be complex, but it doesn't have to be. Bigblue streamlines your entire supply chain, from inventory management to returns processing. Our user-friendly dashboard provides real-time tracking, while automation takes care of tedious tasks. Focus on what you do best - captivating customers - and let Bigblue handle the logistics. Schedule a free consultation with our experts and discover how Bigblue can empower you to achieve e-commerce success.

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Acquiring a new customer can be up to 7 times more expensive than retaining an existing one, underscoring the cost-effectiveness of retaining current customers.

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A key thing to look at here is Customer Lifetime Value (CLV or CLTV). This isn’t just a number. It’s a really important metric for making strategic decisions for your customer's acquisition, and retention strategy, as well as making your business more profitable.

‍

In this guide, we’ll explain what CLV is all about. Let’s start exploring how your customers (and especially loyal customers) are essential for your business’s growth. 

‍

‍

1. Understanding CLV: The foundation of profitable customer relationships

‍

1.1 CLV: A key metric for long-term success

‍

CLV represents the total profit a customer brings to your business over their entire lifespan as a customer. Unlike satisfaction-driven KPIs like NPS or CSAT, which only predict potential revenue, CLV offers a tangible measure of actual profitability over time.

‍

Let's have a look at some numbers:

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• It can cost up to 7x more to acquire a new customer, while it’s 5x more cost-effective to retain an existing one.
• The probability of selling to an existing customer is significantly higher (60-70%) compared to a new one (5-20%).
• You could reduce customer churn rates by 11% simply by reaching out to them.
• The likelihood of an existing customer making a second purchase in the first year is 32%, making a fifth purchase is 70%, and a tenth purchase is 83%. 

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There is a balance to be struck to acquire new customers and optimise their experience while developing profitability.

‍

1.2 Why emphasise CLV in business strategies?

‍

Implementing CLV calculations helps in setting a ceiling for customer acquisition costs, ensuring that each customer relationship is profitable. This strategic focus helps in aligning marketing efforts with business sustainability and long-term customer value.

‍

🤓 For example, If an e-commerce's average CLV is €1,000, and it costs more than €1,000 to acquire a new customer (advertising, marketing, offers, etc.), it means that it is likely to lose money.

This company should make strategic adjustments to reduce its acquisition costs and/or increase customer loyalty to increase CLV.

‍

1.3 How to calculate CLV

‍

Before diving into CLV calculation, remember that a solid acquisition strategy is vital.

Assessing Customer Acquisition Cost (CAC) through various channels like SEA, social ads, or affiliate marketing is key to understanding the full picture.

‍

<sup>The formula to calculate CLV is:
CLV = Customer Value (CV) x Average Customer Lifespan (ACL)

CV = Average order value x Average purchase frequency
ACL = Average of years a customer stays active (Nb of days between the first order and last order date) / Total number of customers</sup> 

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‍

‍

2. Enhancing CLV: 4 proven strategies

‍

2.1 Boosting the average transaction value Average Order Value (AOV)

‍

When you increase your average transaction value, you’re maximising your CLTV.

‍

To increase their AOV, businesses have several strategies at their disposal. Apart from raising prices, you can also sell more products in each transaction, a method known as cross-selling. Another effective tactic is product bundling.

‍

Cross-selling and product bundling can be implemented in various ways:

‍

Based on the product purchased: Suggest products that are directly related to the customer's current purchase. For instance, if a customer buys laptops for their sales team, recommend laptop cases as an additional item or part of a bundle. This approach can effectively increase the value of each transaction.

‍

‍

Using sales or browsing history: Personalise offers based on the customer’s previous purchases or the products and pages they have shown interest in. This aligns the cross-sell or bundle with the customer's specific interests, increasing the likelihood of a larger order.

‍

Based on other customers' purchases: Inform your customers about what's trending or popular related to their interests. Influence their purchase decisions by suggesting products or bundles bought by similar customers.

‍

Incorporating User-Generated Content (UGC), like testimonials from satisfied customers, adds credibility to these suggestions and can persuade customers to opt for higher-value purchases.

‍

2.2 Create unique shopping experience to increase purchase frequency

‍

When buyers find that shopping is simple, enjoyable, or exciting, they're more likely to return frequently!

‍

Create a unique and effortless shopping experience on your website to enhance buyer’s experience:

‍

• Significantly simplify your menu by reducing the number of items,
• Implement a “sticky” feature for your menu, ensuring it's always accessible,
• Design clear, noticeable call-to-action buttons,
• Incorporate a breadcrumb trail for easy navigation,
• Focus on mobile-friendliness, ensuring the essentials are immediately accessible from the homepage.

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Ensure the consumer is guided in their purchasing journey. Utilise pop-ups not only for guidance but also to gather opt-in. Each visit presents an opportunity to strengthen the brand-customer relationship and enhance LTV. 

‍

Make it possible for customers to contact you at any moment. Implement solutions like customer support chat or customer service tools like Gorgias or Zendesk to achieve this. 

‍

Proactively responding to visitor queries, aiding in their decision-making, offering advice on popular products, and providing reassurance on purchases can initially increase the AOV and subsequently, purchase frequency.

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2.3 Make funnel and checkout simple:

‍

‍

Optimise your customer journey with simple product pages that convert with:

‍

• Showcasing user-generated content (UGC) 
• Product pictures
• A simple description of the product's value-added features
• Customer reviews (clickable)
• Call to action “add to cart”
• Logo of trusted providers (Alma, Trustpilot…) for reassurance
• Magazine, influencer, media outlets: anything that will give you credibility to the visitor
• Clear shipping dates and returns policy

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_{Bigblue Tips
Bigblue's Fast Tags feature provides real-time Estimated Arrival Time (ETA) of delivery based on the customer location.
👉 Increase sales at checkout and show customers the quickest delivery option available for them with Fast Tags!} 

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What about the checkout?

A Baymard Institute study showed that 17% of online shoppers cite complicated checkout processes as a reason for abandoning carts. Other reasons included needing to create an account, unexpected costs like shipping and taxes, a slow checkout process, and a lack of trust on the website as a whole.

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A solution is to implement a single-page checkout with different payment options (card, digital wallet like Apple Pay, Buy Now, Pay Later like Klarna…).
9% of shoppers will abandon their cart if they can’t find their preferred payment method.

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<sup>Top 4 favourite payment methods: 
- Credit/Debit card
- Payment via digital wallets (Apple Pay or Paypal)
- Mobile payment (Amazon Pay, Revolut, Mobiamo)</sup>

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2.4 Enhance your post-purchase experience with tracking email and unboxing

‍

The post-purchase experience is a golden opportunity to turn customers into brand ambassadors. 

Engaging tracking emails, unique unboxing experiences, and educational content about the product can significantly impact customer loyalty.

‍

How to do it? 

• Put sponsorship and affiliation links in the tracking emails (possible thanks to Bigblue’s tracking feature!)
• Put forward special customer coupon codes in your email or written on your packaging, thank you flyers 
• Personalised packaging and free goodies
• Ask for customer reviews or UGC, and add a QR code to streamline the process!
• Push educational content on the product 

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Embracing CLV for sustainable growth

‍

Optimising your CLV is not just about boosting short-term profits. 

‍

It is about building sustainable, profitable relationships that benefit both your e-commerce company and its customers. By strategically aligning acquisition, retention, and customer experience efforts, you can unlock the full potential of CLV and drive long-term success.

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Are you ready to harness the power of CLV in your business strategy?

Loop Earplugs, an e-commerce brand from Belgium, has reshaped the ear protection industry, achieving €42 million in 2022. Founded in 2016 by Maarten Bodewes and Dimitri O, Loop Earplugs offers a wide range of noise-reducing earplugs, combining sleek design with practical functionality.

‍

These earplugs, created with both style and comfort in mind, have become a top choice for consumers seeking a blend of fashion and effective hearing protection. Their success is reflected in being rated as the #1 concert earplugs by The New York Times.

‍

Loop earplugs’s journey is a masterclass in targeted marketing, community engagement, and adaptability in the face of unprecedented changes.

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‍

‍

1. Loop earplugs’s success: From an innovative idea to a market domination

‍

1.1 From friends to e-commerce giants

‍

In 2016, Maarten Bodewes and Dimitri O, Belgian friends with backgrounds in commercial and civil engineering, founded Loop Earplugs. Passionate about nightlife, they noticed their ears ringing after a loud concert. This led them to create stylish earplugs that reduce noises and protect hearing.

‍

By 2018, Loop's earplugs were in major stores like CVS in the USA and Saturn in Europe. Today, Loop has 200 employees and offices in Antwerp, Amsterdam, New York, and Shanghai. 

‍

They were named the fastest-growing tech company by Deloitte's 2022 Technology Fast 50. As well, Loop emerged as Belgium's leading technology company, boasting an astounding growth rate of approximately 15,275 percent.

‍

By 2023, Loop Earplugs had grown into a €126.5 million business, selling over 5 million pairs in a year. The New York Times rated them as the best earplugs for concerts in 2023, highlighting their success and popularity. 

‍

‍

.2 The COVID-19 crisis: Strategic pivot to DTC model and retargeting

‍

The COVID-19 pandemic posed an existential threat to Loop, as monthly sales plummeted. Bodewes recalls a point where they were "two weeks away from not having any money." This period, however, was marked by two strategic pivots that would redefine Loop's trajectory. 

‍

To survive, the company shifted to a direct-to-consumer (DTC) model, simplifying packaging and focusing on marketing earplugs as everyday essentials for work, relaxation, and sleep.

‍

Their initial target was nightclub goers and party people, but as COVID-19 hits, everything was cancelled and everybody in lockdown. 

‍

At the time, Loop earplugs had to make important decisions about their target audience and how to broaden their reach. 

The company thrived by listening to its customers, using surveys to uncover new use cases, and tailoring its marketing strategies accordingly.

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They discovered an unexploited base: parents/kids, noise-sensitive individuals, ADHD and autistic people experiencing sensory overload, people who want to focus at work, sleep better, for relaxation or riding motorcycles. 

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‍

2. Innovating the earplugs market: Redefining ear protection with style and function

‍

Loop Earplugs, priced between £19.95 and £54.95, have consistently turned a profit since 2020, thanks to their cost-effective production, as noted by Bodewes. 

‍

Moving away from the traditional, boring designs, Loop has reinvented earplugs as fashion accessories, featuring vibrant colours and metallic finishes.

‍

Their diverse product range caters to various needs for noise reduction, with options like Switch, Quiet, Loop Experience (Plus), and Engage (Plus & Kids). Each pair comes with differently sized silicone ear tips to fit individual ear shapes comfortably. 

Additionally, they also have a line of accessories to increase the average order value through active upsells on both their cart and products pages. 

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‍

Embodying a bold, confident, and colourful identity, Loop Earplugs symbolise freedom and self-expression — whether you're dancing, riding, exploring the world, or relaxing at home.

‍

"There's an increase in awareness because of the taboo that is being broken when more people wear [earplugs]. It's becoming more accepted." says Bodewes.

‍

‍

The Loop brand voice, with its distinctive geometric O-shaped icon, is confident and positive. Their packaging further distances the product from “traditional medical aesthetics”, featuring a bright colour palette and including QR codes linked to video tutorials for ease of use.

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‍

Loop's website enhances customer experience with incentives like free returns for 100 days, free shipping on orders over £39, and appealing bundles that improve conversion rates. 

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‍

Their tailored quiz helps customers find the perfect product fit, showcasing Loop's commitment to customer satisfaction and innovative marketing.

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‍

3. Loop earplugs marketing masterclass: Engaging community, whitelisting and A/B testing 

‍

3.1 Loop's Strategic ad spend and precision targeting

‍

The company spent €1.5 million monthly on ads.

‍
This budget was allocated to a mix of whitelisting and non-branded ads across social media platforms like Instagram, Facebook, and TikTok. 

‍

A critical component of their advertising strategy was the use of A/B testing at scale.

This approach allowed them to continuously refine and optimise their ads and landing pages, ensuring they resonated with the specific needs and preferences of each target audience segment.

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‍

“With those different use cases, we created very different ads, very different landing pages, and different prices to test to see what works and to see what has the best return on ad spend,” Dimitri says. “Then, we scaled those use cases on Facebook, Instagram, and TikTok with ads and with the influencers most.”

During the second part of 2020 and all of 2021, Loop found new audiences and focused on building this customer base. The company grew from €1 million to €12 million in revenue. 

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3.2 Building a passionate community: Loop's affiliate program, UGC and influencer engagement

‍

Loop has created a strong sense of community around its products through loyalty and referral programs, brand ambassadors, influencer-generated content and user-generated content.

‍

On Instagram, the hashtag #loopearplugs has over 5k posts and on TikTok, the brand has over 3B search views. 

For their influencer partnership, they are partnering with different influencers from different communities like with ADHD specific groups. 

‍

‍

Loop Earplugs has implemented a clever strategy for their ambassador marketing by creating a specialised landing page dedicated to attracting potential affiliates. 

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‍

• Community program: The Loop Community offers exclusive rewards and content through challenges and referrals, allowing members to earn credits, unlock new challenges, and receive rewards like event tickets and product co-creation opportunities.
• Friends referral: Loop also give the opportunity to win up to €100 depending on the number of friends that you refer.
• Affiliate marketing program: The Loop Affiliate Program pays participants to create content and share referral links with their unique code, with earnings based on the purchases made by referred customers, supported by provided media resources and tracking via an affiliate network. 15% of sales 

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Their ambassador and affiliate programs, alongside a robust community around their products, further helped Loop's position in the market. 

‍

3.3 Loop earplug’s game-changing SEO strategy for organic growth 

‍

Loop Earplugs, in collaboration with Re:signal, clinched the Consumer Goods category at The Drum Awards for Search.

‍

In 2022, their primary goal was a substantial rise in organic revenue and establishing themselves as market leaders in the US and UK. 

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Their strategy involved a detailed analysis of the customer buying cycle, focusing on stages of Awareness, Consideration, and Conversion. 

They targeted high-traffic keywords likely to yield strong conversion rates, such as 'ear plugs for...'. 

‍

‍

This approach shaped their content strategy, aiming to attract new customers, maintain visibility at the purchase point, and achieve high rankings for both specific and generic terms like "ear plugs for musicians". 

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The content, tailored to engage customers at different stages of the buying cycle, led to significant growth. Loop saw a +25.64% increase in sessions and a +34.02% rise in revenue for Jan-Dec 2022. Additionally, from Jun 2022 to May 2023, they experienced a +60.3% increase in sessions and a +106.9% growth in revenue, highlighting the effectiveness of their targeted approach.

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Loop's journey from a two-man operation to a multi-million euro enterprise is not just about financial success; it's a story of two friends who turned a personal problem into a global solution, and in doing so, created a community and a brand that resonates with millions.

This story is inspiring for every entrepreneur and a reminder that with the right mix of innovation, resilience, and community focus, the sky's the limit. 

An optimised fulfilment process that guarantees both convenience and quick deliveries is one of the standards of successful e-commerce businesses.

With nearly half of consumers valuing fast shipping, it's important to match or exceed the high benchmarks set by giants like Amazon. 

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This guide navigates the essentials of omnichannel fulfilment and e-commerce fulfilment in the UK, from in-house fulfilment to collaboration with third-party logistics (3PL) partners. 

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1. What is e-commerce order fulfilment?

‍

Order fulfilment involves storing, picking, packing, shipping and delivering products to customers. It also involves processing returns.
Whether it's for B2B orders sent to large retailers or B2C orders delivered directly to a customer's home. 

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^{According to Statista, more than 161 billion parcels were shipped globally in 2022. It is expected to reach 256 billion parcels shipped in 2027.} 

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Customers place orders through a brand’s website or on marketplaces. Once a purchase is made, the e-commerce order fulfilment process starts. 

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Having efficient fulfilment is the key to unlocking customer trust and loyalty with a seamless shopping experience. 

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Do you know about green fulfilment or green logistics?
‍
Bigblue is working hard to make e-commerce greener! We are tackling the environmental impact of online shopping with initiatives like:

• Teaming up with other eco-friendly companies to find innovative solutions.
• Using special algorithms to reduce packaging waste and delivery errors.
• Getting our warehouses certified to meet strict eco-requirements.
• Powering ourservers with renewable energy like solar panels.
• Offering plastic-free packaging options made from recycled materials.

By choosing Bigblue, you're not just getting a 3PL partner, you're joining our mission for green fulfilment and a sustainable e-commerce future! If you want to know more about our initiatives, you can read our manifesto. 

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2. The lifecycle of an e-commerce order

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Every step, from 'buy' to delivery, is a chance to impress or deceive a customer. Understanding this lifecycle is crucial for any e-commerce business aiming for excellence.

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2.1 5 steps in the e-commerce fulfilment process

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2.1.1 Inventory reception

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The initial stage in e-commerce fulfilment is receiving the inventory, which is essential for managing and preparing stock to complete orders. 

The products are then counted, and controlled for quality. 

This step is to maintain an organised stock and ensure precise inventory levels. 

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When working with a 3PL, this involves transporting the inventory to their fulfilment centre.

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2.1.2 Inventory storage

‍

Effective inventory storage, or warehousing, is essential for organised and secure product storage. 

‍

Each unique product or Stock Keeping Unit (SKU) needs a specific storage location. 

‍

Advanced warehousing systems adapt to product needs, using shelves, racks, bins, or pallets. Clothes may be stored on hanging racks and jewellery in secure lockers, ensuring each item is stored accordingly.

‍

‍

Additionally, live inventory management is a modern standard, offering real-time visibility into available items. 

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‍

^{Tips:
Choose warehouse locations strategically, preferably close to end customers, for optimal efficiency.
Implement live inventory tracking for real-time visibility and better management.}

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2.1.3 Picking and packing 

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Order processing begins once a customer places an order. It involves picking items from their storage locations and packing them for shipment. 

‍

Advanced warehouse management software (WMS) and strategies like single-order or multi-order picking can greatly enhance this process. 

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Bigblue developed Atlas, our WMS to streamline the picking process in our warehouses. Our system reduces errors, faster picking and gives packaging recommendations. 

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The use of environmentally friendly packaging can help cater to environmentally conscious standards. And live up to the unboxing expectations with personalised packaging or flyers. 

‍

A packing slip, detailing quantities, storage locations, and packaging instructions, is crucial for a streamlined process.

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^{Tips:
Utilise technological tools for efficient and accurate picking and packing.
Consider the environmental impact and marketing potential of your packaging. A memorable unboxing can make your brand stand out!} 

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2.1.4 Delivery

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Delivery is the phase where the processed order reaches the customer. It is one of the most important parts of the order fulfilment process. 

‍

^{Last mile delivery can add up to 53% of the total cost of a shipment.}

‍

38% of shoppers will never shop with a retailer again if they have a poor delivery experience.

It involves choices from a variety of shipping options, including local post offices or courier services. 

‍

Flexibility in selecting carriers is crucial, as reliance on a single provider can limit options. Providing tracking information ensures customer transparency. 93% of customers want proactive updates from retailers about their parcels. 

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^{Tip: You can integrate an email workflow to provide informative and engaging order-tracking emails!} 

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Sustainable shipping options like carbon-neutral shipping are increasingly important. Many customers are willing to change their buying habits for environmental benefits. 

‍

Incorporate standard and express shipping options to meet high customer expectations set by services like Amazon's next-day delivery.

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At Bigblue, we have developed a smart carrier solution designed to be the most efficient way to save time and money on logistics. This algorithm selects the most cost-effective carrier while also aiming to minimise delivery problems.

It also encourages customers to buy more for free shipping, increasing sales.

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^{Tips:
Offer diverse and sustainable shipping options to meet customer preferences.
Consider incorporating shipping costs into product prices for a better customer experience.}

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2.1.5 Return management

‍

Effective return processing is pivotal in e-commerce logistics. It encompasses handling unsuccessful deliveries and managing customer returns. A positive return experience can significantly increase customer loyalty. 

‍

Including a printerless returns option makes the process easier for customers. Adding this to a return label and extended return periods can help lower the overall return rate.

A fulfilment partner can help in quality control and restocking. 

‍

Utilising tools like Bigblue's dashboard can also efficiently track returns.

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3. Order fulfilment models

Knowing the various order fulfilment models is key for businesses to align their strategies with specific needs and goals. The main models include:

‍

3.1 In-house fulfilment

‍

Advantages:

‍

Customisation: Enables tailored processes to meet unique business requirements.

Quality assurance: Direct oversight ensures rigorous quality control measures.

‍

Disadvantages:

‍

High initial costs: Substantial upfront investment is required for infrastructure and high volumes are needed to negotiate prices with carriers. 

Limited scalability: Expansion may be constrained due to resource needs.

Operational complexity: Managing every aspect internally can lead to increased complexity.

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3.2 Outsourcing fulfilment to a third-party logistics (3PL) Company

‍

Advantages:

‍

Cost efficiency: Access to established infrastructure often results in lower overall logistics costs.

Scalability: Allows for quick expansion without significant upfront investments.

Focus on core competencies: Enables focus on core activities while a third-party fulfilment partner handles it.

‍

Disadvantages:

‍

Less control: Reduced oversight poses challenges in maintaining full control.

Dependency on providers: Business success relies on the efficiency of the chosen 3PL provider.

Communication challenges: Coordination and communication may pose challenges due to physical separation.

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3.3 Multi-channel fulfilment

‍

Advantages:

‍

Market diversification: Expanding across channels provides access to diverse customer bases.

Increased sales opportunities: Presence on multiple channels increases market share.

Adaptability: Allows businesses to adapt to changing market trends.

‍

Disadvantages:

‍

Inventory management complexity: Coordinating inventory across channels can lead to increased complexity.

Logistic challenges: Managing diverse shipping processes requires careful coordination.

Brand consistency challenges: Ensuring consistent brand representation becomes challenging.

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3.4 Dropshipping

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Advantages:

‍

Low initial investment: Minimal upfront costs as the business does not need to hold inventory.

Product variety: Access to a wide range of products without extensive warehousing.

Low risk for new businesses: A low-risk entry into e-commerce is especially beneficial for new businesses.

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Disadvantages:

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Limited control over inventory: Lack of control over stock levels and potential product shortages.

Dependence on suppliers: Reliance on suppliers' inventory and shipping capabilities can impact operations.

Lower profit margins: Profit margins may be lower due to additional costs associated with dropshipping.

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Each fulfilment model presents unique opportunities and challenges. 

Businesses should match their priorities and resources with the right fulfilment model to suit their strategy.

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4. What constitutes a successful fulfilment strategy?

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4.1 Same-day fulfilment

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In the world of e-commerce fulfilment, speed is key. For a logistics partner to be deemed dependable, it is imperative that they ensure the quick processing of orders. Ideally, the delivery should happen on the same day as the purchase or, at the latest, the next day.

Same-day delivery can result in a 2X increase in conversion rates for online businesses.

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^{Tip: Evaluate the cut-off times for same-day fulfilment when selecting a fulfilment partner.} 

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4.2 Precision in order fulfilment

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Speed in the order fulfilment process loses its value if accuracy is compromised. A low error rate in fulfilment is essential. Accept nothing less than a 90% accuracy rate, aiming for even higher standards.

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4.3 Handling high order volumes

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Managing small quantities might be straightforward, but the real test for fulfilment centres comes with high order volumes. 

The best fulfilment companies maintain efficiency even during peak periods like Black Friday or Christmas, as well as during sales campaigns. 

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For instance, influencer or UGC-driven sales can trigger a surge in orders within hours. Here, the ability to handle the influx without errors is critical.

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4.4 Fulfilment costs

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Cost considerations are vital for entrepreneurs. Outsourced order fulfilment may seem more expensive initially. However, its scalability and growth potential often outweigh the advantages of in-house operations.

Rapidly growing businesses can benefit from shifting from in-house operations to 3PL. It allows them to leverage the broader capabilities of fulfilment centres. 

For smaller enterprises with lower shipping volumes, in-house fulfilment might still be advantageous.

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5. What are the main challenges in e-commerce fulfilment?

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5.1 Integration with multiple platforms

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Integrating the fulfilment process with different e-commerce platforms and systems like CMS and CRM is complex.

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Different platforms like Shopify, BigCommerce or Magento have their own integration challenges, impacting a store's fulfilment management. The main challenge is ensuring consistent data and timely updates across platforms for smooth order processing and inventory management.

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5.2 Customisation and Personalisation

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Fulfilling customer expectations for customised and personalised products adds layers of complexity. Tailoring products to individual preferences often requires flexible and adaptive fulfilment processes, which can be resource-intensive and time-consuming.

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5.3 Global and regional challenges

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Cross-border e-commerce is complicated by varying tax regimes, customs regulations, and shipping restrictions in different countries. Adaptable fulfilment strategies are necessary to comply with these diverse regulations, ensuring efficient and compliant international operations.

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5.4 Sustainability and eco-friendliness

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The increasing consumer demand for sustainable and eco-friendly practices in packaging and shipping presents a challenge. To meet these consumer expectations, businesses must adapt their packaging and shipping processes to be more environmentally friendly, often without significantly increasing costs.

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5.5 Customer expectations and experience

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Providing excellent customer service with quick responses and effective problem-solving is key to keeping customers. However, this can be resource-intensive, requiring dedicated support teams and efficient customer service processes.

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5.6 Product nature

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The type of products being sold also significantly influences the fulfilment strategy. Perishable goods, for instance, require different handling and storage conditions compared to bulky items. This requires specialised storage solutions and shipping methods tailored to maintain product integrity and ensure safe delivery.

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6. Scaling with a 3PL: Bigblue clients’ success stories 

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SmartWorkout, aspiring to make bodybuilding accessible in Europe, partnered with Bigblue for efficient continental deliveries. 

Over 50% of international orders were shipped seamlessly. Fast-Tags enhanced conversion by 22% and Bigblue's Amazon integration accelerated SmartWorkout's growth across countries.

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"Bigblue enabled us to expand into new markets and ensure efficient delivery throughout Europe." - Christelle and Lucas, SmartWorkout founders

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Read SmartWorkout full story 

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Detective Box achieved a phenomenal 3,000% growth, overcoming logistical challenges with Bigblue's tailored e-commerce logistics platform. 

The collaboration extended beyond logistics, enhancing the post-purchase experience with personalised 'Gift Notes'. 

Efficient real-time tracking contributed to a 92% delivery customer satisfaction rate!

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Émilie Bernier O'Donnell, founder, takes us behind the scenes of Detective Box and reveals how Bigblue became a key partner in their meteoric success. Have a look at the interview!

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More info about Detective Box here

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Believe Athletics, led by Regina Rodriguez, experienced transformative success with Bigblue's logistics platform. The Fast Tag feature boosted the conversion rate by +25%, providing transparent delivery dates. 

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Regina achieved 100% customer satisfaction with eco-friendly packaging. 

The returns portal with the store credit option led to a +15% increase in average spending. Bigblue turned logistical challenges into growth opportunities for Believe Athletics.

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Read Believe Athletics full story

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E-commerce order fulfilment is more than just handling logistics and supply chain. It is key to gaining customer trust and loyalty.

The goal is to ensure a smooth and enjoyable shopping experience.

With the right process, technology, and know-how, efficient order fulfilment can boost your business growth and customer satisfaction.

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Tired of managing fulfilment and limiting your reach? Bigblue offers end-to-end e-commerce fulfilment across Europe, allowing you to focus on growing your brand. Leverage our 8 strategically located warehouses, user-friendly dashboard, and seamless integrations to expand your brand reach and delight customers internationally. Contact us today and unlock the potential of the European market!

Dropshipping was, for the last couple of years, the thing to do if you want to build a successful e-commerce business. I mean we’ve all seen those ads telling you how Teddy, who was broke and slept on his best friend's couch, made thousands of dollars within a week through dropshipping.

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Running a dropshipping store is a valuable experience. It means that you know how to run online ads and digital marketing campaigns, how to set up a Shopify store, how to manage customer relationships, and how to deal with huge peaks of stress.

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Some of you have tested it and failed, while some others have succeeded (congratulations!). Top dropshippers indicate that the success rate in the dropshipping business ranges from 10 to 20%. Only Just 10% of dropshippers achieved success in their first year!

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In the latter case, it means that not only do you have the necessary skills to run an online business, but you also know your market. You have the customer base and the money to reach new heights and lead your brand to bigger stages.

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In this blog post, you’ll find a step-by-step guide on how to transition from dropshipping to traditional e-commerce. Before we move further, let me explain why it is necessary to move into e-commerce to achieve growth and success for your brand.

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1. Dropshipping vs e-commerce: The key differences

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Despite being a cheap and lost-risk way to start an online business, dropshipping has many limits in the long term. Since you have zero control over your inventory, it is hard to ensure that your products are processed straight away or aren’t on backorder. You also lack visibility on your product quality.

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Knowing that dropshipping margins are low, it is hard to make huge profits on single items. This means that you’ll need a high sales volume to make profits, but volume means more orders, more orders mean more logistics-related problems and more problems mean less time to focus on your brand’s growth.

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One of the biggest cons of dropshipping is also the lack of control over the product’s quality. This leads to a difference between your customer's expectations and the product in reality, which results in an unpleasant customer experience.

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This lack of control over many important factors of your business and the long shipping time negatively affect the whole experience and are the biggest limitations of dropshipping, which leads to stagnation.

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When it comes to proper e-commerce, it is slightly different. Starting an e-commerce requires some investment to support the expenses related to manufacturing and storage. It also represents a greater risk since the investment is bigger. Saving some money from your dropshipping activity can be a great way to cover these expenses.

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Since you have more control over every part of your business, you’ll be able to negotiate your manufacturing costs and set your selling price and thus ensure to have the right margins.

Another advantage is that you have full control over your brand and you can offer high-quality products. I mean you can manufacture your product line, you can also manage your inventory however you want and so you have full control over all your supply chain processes, from manufacturing to shipping. 

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This will help you offer different shipping options (No, 30-day shipping isn’t an option any more) and ensure the best experience for your customers.

Going from dropshipping to traditional e-commerce will play a major role in upgrading your customers' experience and driving growth.

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Getting the most out of dropshipping and overcoming its limitations by expanding your business to e-commerce is a great solution if you want to develop a successful and widely-known brand.

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To help you during your transition from dropshipping to e-commerce, you can follow this step-by-step guide:

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2. Finetune and adapt your brand idendity

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This is the most important part of your transition as it will affect every step you’ll take during your e-commerce journey.

Building on your dropshipping foundation, it's time to deepen your brand identity for the e-commerce transition. 

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Reflect on the insights gained from your initial venture. 

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Ask critical questions: How can your brand better serve its target audience? What unique value can you offer in the e-commerce space? Use these insights to refine your brand's vision and values. 

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Upgrade your website and marketing strategies to mirror this evolved identity, ensuring they resonate more effectively with your audience and set you apart in the competitive e-commerce landscape.

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3. Develop a product design and source potential manufacturers

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You’ll have to think about your product design and its specific components. Having previous experience in your niche thanks to your dropshipping website, should help you to understand your customer's expectations and determine which kind of product you want to develop and what are its differentiating features.

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Once you have the design, you can start looking for a manufacturer. Think about where you want your products to be manufactured.

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During your choice, you’ll need to consider different factors. You’ll have to understand the costs associated with each manufacturer. If this one is overseas, you’ll also need to inform yourself about importation processes and the costs related to it. You can have a look at Ovrsea or Flexport, which are freight forwarders companies that can help you with your cargo’s importation.

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To get you started, you can contact your old dropshipping provider who can introduce you to potential manufacturers or maybe even manufacture your products by himself.

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Don’t forget to take into consideration your brand’s positioning during your manufacturer choice and product design. For example, if you’re selling sneakers and you position yourself around sustainability and you target vegan consumers. Make sure to use raw materials and choose a manufacturer that respects your brand’s values.

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3.1 The ultimate checklist for negotiating manufacturing costs

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Preparation:

• Gather industry pricing data through market research.
• Analyse raw material and labour costs.

• Assess reputation and certifications.
• Verify compliance with standards.

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Relationship building:

• Establish transparent channels.
• Build trust and reliability.

• Regularly engage with suppliers.
• Attend industry events.

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Negotiation strategies:

• Determine optimal order volume.
• Explore discounts for larger orders.

• Encourage competitive bidding.
• Shortlist potential manufacturers.

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Cost understanding:

• Break down manufacturing costs.
• Identify potential savings.

• Negotiate favourable payment terms.
• Align terms with cash flow.

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Post-negotiation:

• Finalise terms and conditions.
• Specify quality standards and timelines.

• Establish ongoing cost reviews.
• Adjust strategies based on market changes.

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Legal and compliance:

• Ensure contract legality.
• Address intellectual property considerations.

• Confirm supplier compliance.
• Adhere to environmental regulations.

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Relationship management:

• Implement monitoring systems.
• Address issues promptly.

• Establish continuous improvement.
• Encourage mutual feedback.

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4. Create a business plan and make a budget forecast

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Transitioning from dropshipping to e-commerce requires higher investment and better planning, for that, you can use the business model canvas.

This will help you determine all the big aspects of your business like your cost structure and your revenue streams.

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To reduce all risks, make sure to forecast all your costs and revenues. This will also allow you to have better control over your finances and to better plan your business growth. It will help you to predict your cash flow and make better strategic decisions.

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5. Choose your logistics provider

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The main difference between dropshipping and e-commerce is that you’ll be managing your inventory.  

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While it can be easy to do it during the early stages, managing e-commerce logistics becomes a real pain as soon as orders start to flow, especially when you have no previous experience with logistics.

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The best option for this matter is to work with a logistics provider who can handle your inventory storage, order fulfilment, and returns. This will ease the burden on your shoulders and you will be able to focus your effort on other areas of your business. It will also help you get the best rates for storage and transportation.

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Make sure to choose a logistics partner that can scale with you and support your worldwide expansion. 

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Choosing a provider who will help you optimize your logistics processes in the short and long run is crucial to ensure continual growth.

Working with logistics experts will help you offer the best options for your consumers. They won’t need to wait 30 days to get their products any more. This will drive better satisfaction and an upgraded customer experience.

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Deciding the right logistics provider is a tricky task as there are many factors that you should take into consideration. To know more, check our article on how to choose the best logistics partner for your e-commerce.

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<sub>Bigblue tips

Unlock the full potential of your e-commerce logistics with Bigblue. Benefit from our industry-specific expertise and seamless platform integration to streamline your operations. Elevate the brand-customer relationship through accurate delivery estimates, live tracking, and personalised unboxing experiences. Committed to sustainability, we align with the increasing environmental awareness among consumers. 

Choose Bigblue as your logistics partner, offering expert guidance and robust solutions to foster your business growth.</sub>

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6. Develop a marketing strategy to launch your e-commerce store

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If you’ve successfully managed all the steps above, you’re almost done with your transition. While your products are being manufactured, don’t forget to set a marketing strategy to notify your current customer base about the changes you’re making. Keeping your customers updated will drive more engagement towards your brand.

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Think about promoting your new products on social media and by email. Make sure to take advantage of the momentum you generated through your dropshipping activity by distributing coupons to your previous customers to push pre-orders.

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Try to also focus your efforts on the launching day as if it were an event that no one wants to miss. This will help you to drive sales from the first minute of your e-commerce journey and introduce yourself to the market in the strongest way.

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You can also engage with influencers in your niche to build trust, boost awareness around your brand and promote your product on social media. Working with influencers is also a great way to generate content about your brand without spending too much effort.

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Try to encourage your customers to leave reviews, and feedback or create user-generated content for your brand. You can, for example, create a hashtag that your customers can use on social media and promote on your channels. User-generated content is usually more trusted and doesn’t cost anything.

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So depending on your niche, choose the most suitable channels and push marketing as much as possible to boost pre-orders and ensure a strong introduction into the market.

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7. Enhance your customer's experience and create brand advocates

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Now that you have full control over every aspect of your business and you have got rid of all the dropshipping limitations, you can upgrade your customers’ experience and provide the best journey possible for them.

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Once your customers notice your effort and your improvement, your relationship will get even stronger and you’ll be able to build a real engagement toward your brand.

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Take advantage of this and try to build a network of brand advocates who will promote your brand and products for you.

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Don’t forget to build a strong customer support team to answer and fix your customer's inquiries and ensure the best experience for them at every stage of their journey.

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Dropshipping is a great way to start your online business but its limitations make it difficult to achieve sustainable growth.

However, it is a great way to gain the experience needed to run an e-commerce store and is a great first step to growing a successful brand.